TOB Magazine

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had a problem in your store unless
someone told you to your face,” says Mi-
chael Herklots, vice president of retail
and brand development for Nat Sherman.
“But today, all you have to do is be active
across platforms, engage with the reviews
and share them with the team.”
Herklots emphasizes that these reviews
are often “not necessarily about the prod-
ucts we sell, but mostly about everything
else—the service, the people and the over-
all experience.” He adds that engaging in
these tools are “so easy and free, and allows
retailers to manage their business; these re-
view sites become your surveillance.”
THE TOBACCO OUTLET TAKEAWAY:
Get in the online game across platforms
and use customer feedback as a serious
business tool.
WHEN CIGAR SKUS ARE BAD TEN-
ANTS, EVICT THEM. What tobacco-
nists let go of in inventory is often a key
component to success, they say. And now,
more than ever, streamlining successful
SKUs will be imperative. “You have to
track them just like batting averages,” says
Garofalo. “We look at it on a daily basis
along with our employees—they know
the profit margins of each product and
they know it by week of the year prior,
too.” And most importantly, they know
what to do when the numbers aren’t there.
“I have to get rid of product that will
hurt me,” he continues. “My biggest
competition is one click away, which is
on every customer’s cell phone as they
check out prices online when they’re in
my store. So if I can’t make margin, it has
to go. I could personally love to smoke a
particular cigar, but if it’s not good for my
business, I can’t sell it in my store.”
Similarly, Dababneh figured out what
he had to do with brands that are not
moving—they go to a discount bin or 20
percent off table, or he gives manufactur-
ers the opportunity to switch them out.
“Every foot of retail space in humidors are
like tenants that pay rent, and if they’re
not paying their full rent, we need to evict
them,” he reasons. “And it’s in manufac-
turers’ best interest to switch product out.
Don’t be afraid to ask.”
Herklots agrees that often manufactur-
ers will take back product that isn’t selling
in your store and use it for promotions.
“They’d much rather work with you to
preserve their retail, rather than you feel-
ing it’s your mistake that you have to deal
with yourself,” he says.
THE TOBACCO OUTLET TAKEAWAY: Fall-
ing in love with inventory can cost you your
cigar business. SKUs have to be tracked and
manufacturers have to be informed.
THINK OUTSIDE OF THE BOX WITH
EVENTS AND PROGRAMS. Dababneh
and Smoke Inn are known among to-
bacconist peers for thinking “completely
outside of the box”with events like multi-
vendor activities and promotions like ra-
dio shows, according to Herklots.
Dababneh is more modest, saying
“there are very few original ideas—it’s not
that I thought these up, but I do try to
look around and then try to make some-
thing my own.”
He admits that he often gets other retail-
ers who come to his major event every year
so that they can observe first-hand and be
inspired. “I’m a big believer that everything
in this industry is good for the whole. Any
kind of positive experience is good and is
seed for re a small industry.”
And so this year, Dababneh is giving
away a Cadillac for Smoke Inn Cigars’
20th anniversary event. “Don’t be afraid
to ask—people will work with you and
some more than others. Some manu-
facturers are very out of the box—you’ll
know them because they’re quick to re-
spond and they work with you,” he offers.
Garofalo says that what’s helped him
in this vein is his rewards program that
he started back with the “computer age in
’97,” but continuously updates. “Once you
start tracking, you’ll be amazed to find
out the quiet guy is your best customer,
and you’ve never really taken care of him;
you assumed it was the loudmouth that
hangs out for the day, but he is actually
buying cheaper cigars.”
To reward his best customers, Garofalo
holds a special dinner every year that is on
par with receiving a wedding invitation;
a chef is brought in to the banquet area
of one of his stores and the attendance is
very limited. Unlike at a monthly cigar
event, these customers are not targeted
for sales that night. Instead, they are be-
ing rewarded for their loyalty and the
business they’ve already given to the store.
“The next thing you know, they’re
bringing in their friends the next time
they come into the store, who often be-
come future top customers,” Garofalo
explains. “We see how powerful word-of-
mouth can be when more people want to
become a part of a night they can’t buy to
attend. We’re giving them an out-of-the-
box experience, and it just makes them
even more loyal. It’s called reciprocity.”
THE TOBACCO OUTLET TAKEAWAY: Go
big and go original when planning your
future cigar events. Loyalty will be the
payback. TBI
C I GAR SENSE
20
TOBACCO BUSINESS INTERNATIONAL
NOVEMBER/DECEMBER 2016
Falling in love
with inventory
can cost you your
cigar business.
SKUs have to
be tracked and
manufacturers
have to be
informed.